4.	Selected Balance Sheet Data

Other Assets

Other assets consisted of the following (in thousands):

 

		Current December 31,								Non-Current December 31,
		2015				2014				2015				2014
Due from independent contractors, net (1) (2)		$	2,545			$	1,577			$	7,358			$	1,820
Security deposits			—				—				1,425				1,240
Employee notes receivable (3)			224				216				158				162
Customer trust accounts and other			2,367				1,262				175				222
		$	5,136			$	3,055			$	9,116			$	3,444

 

(1)

Represents amounts advanced, notes receivable and other receivables due from the Company’s investment sales and financing professionals. The notes receivable along with interest, are typically collected from future commissions and are generally due in one to five years. As of December 31, 2015 and 2014, the weighted average interest rate for notes receivable due from the Company’s investment sales and financing professionals was approximately 2.9% and 2.8%, respectively. Any cash receipts on notes are applied first to unpaid principal balance prior to any income being recognized.

(2)

Includes allowance for doubtful accounts related to current receivables of $359 and $193 as of December 31, 2015 and 2014, respectively. The Company recorded a provision for bad debt expense of $281, $29 and $207 and wrote off $115, $59 and $152 of these receivables for the years ended December 31, 2015, 2014 and 2013, respectively.

(3)	See Note 7 – “Related-Party Transactions” for additional information.

 

Deferred Compensation and Commissions

Deferred compensation and commissions consisted of the following (in thousands):

 

		December 31,
		2015				2014
SARs liability		$	21,399			$	20,542
Commissions payable to investment sales and financing professionals			17,015				12,176
Deferred compensation liability			5,264				3,863
		$	43,678			$	36,581

SARs Liability

Prior to the IPO, certain employees of the Company were granted stock appreciation rights (“SARs”) under a stock-based compensation program assumed by MMC. In connection with the IPO, the SARs agreements were revised, the MMC liability of $20.0 million for the SARs was frozen at March 31, 2013, and was transferred to MMI through a capital distribution. The SARs liability will be settled with each participant in installments upon retirement or departure. Under the revised agreements, MMI is required to accrue interest on the outstanding balance beginning on January 1, 2014 at a rate based on the 10-year treasury note plus 2%. The rate resets annually. The rate at January 1, 2015 and 2014 was 4.173% and 5.03%, respectively. MMI recorded interest expense related to this liability of $857,000 and $984,000, for the years ended December 31, 2015 and 2014, respectively. During 2014, the Company reduced the SARs liability balance in the amount of $412,000 related to a distribution for the settlement of FICA taxes payable on behalf of certain participants.

Commissions Payable

Certain investment sales professionals have the ability to earn additional commissions after meeting certain annual revenue thresholds. These commissions are recognized as cost of services in the period in which they are earned. The Company has the ability to defer payment of certain commissions, at its election, for up to three years. Commissions payable that are not expected to be paid within twelve months are classified as long-term liabilities.

Deferred Compensation Liability

A select group of management is eligible to participate in a Deferred Compensation Plan. The plan is a 409A plan and permits the participant to defer compensation up to limits as determined by the plan. The Company elected to fund the Deferred Compensation Plan through company owned variable life insurance policies. The Deferred Compensation Plan is managed by a third-party institutional fund manager, and the deferred compensation and investment earnings are held as a Company asset in a rabbi trust, which is recorded in assets held in rabbi trust in the accompanying consolidated balance sheets. The assets in the trust are restricted unless the Company becomes insolvent, as defined in the Deferred Compensation Plan, in which case the trust assets are subject to the claims of MMI’s creditors. The Company may also, in its sole and absolute discretion, elect to withdraw at any time all or a portion of the trust assets by an amount by which the fair market value of the trust assets exceeds 110% of the aggregate amount in the Deferred Compensation Plan’s participants’ accounts.

 

The net change in the carrying value of the assets held in the rabbi trust and the net change in the carrying value of the deferred compensation obligation, each exclusive of additional contributions, distributions and trust expenses consisted of the following (in thousands):

 

		December 31,
		2015				2014				2013
(Decrease) increase in the carrying value of the assets held in the rabbi trust (1)		$	(57	)		$	290			$	495
(Decrease) increase in the carrying value of the deferred compensation obligation (2)		$	(67	)		$	313			$	504

 

(1)	Recorded in other income (expense), net in the consolidated statements of net and comprehensive income.

(2)	Recorded in selling, general and administrative expense in the consolidated statements of net and comprehensive income.